Our Latest Thinking

The Internal Revenue Service has announced the 2019 deferral limits to save for your retirement. Below is a table outlining 401(k), SIMPLE IRA and IRA deferral limits. See if you can increase your deferral limit for the 2019 calendar year!

*If you are considered a Highly Compensated Employee, you may face restrictions on the amount you can defer. Talk with an HFM Investor Coach if you have questions about your deferral limits.

2019

2018

401(k), 403(b), 457 Elective Deferral Limit

$19,000

$ 18,500

Catch-up Contribution
(age 50 or older)

$6,000

$ 6,000

SIMPLE IRA Limits

$13,000

$ 12,500

SIMPLE IRA Catch-up contribution (age 50 or older)

$3,000

$ 3,000

IRA Contribution Limit

$6,000

$ 5,500

IRA Catch-up Contribution
(age 50 or older)

$1,000

$ 1,000

All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.

HFM is not in the business of providing legal advice with respects to ERISA or any other applicable law. The materials and information do not constitute, and should not be relied upon as, legal advice. HFM Investment Advisors LLC are not tax advisors and none of the information provided should be considered tax advice. Please consult your tax advisor for additional guidance relating to your personal tax situation.

It is our pleasure to announce we are expanding our HFM team to include Investor Coach, Catherine Allen-Carlozo.

For more than 30 years, Catherine’s passion has been working in financial services focusing on the unique needs of women and helping small business owners develop and implement their individual financial plans. As a CERTIFIED FINANCIAL PLANNER ® for more than 10 years, Catherine is highly qualified to provide HFM’s excellent level of service to our clients.

Her involvement in the community on both the professional and personal level is extensive. Catherine is the president of South Jersey Women in Business group. She is also a member of NAWBO (National Association of Women Business Owners), the Society of Financial Service Professionals, the Estate and Financial Planning Council of Southern New Jersey, the National Association of Professional Women and the Financial Planning Association, local and national chapters. Other charities she supports include Habitat for Humanity, Camden County Women’s Center, and Operation Yellow Ribbon.

Catherine is also an accomplished speaker and will represent HFM well by providing her expertise in Financial Planning, Retirement Planning, Investment Management and many financial topics specific to women throughout our region.

We are constantly looking to improve our value and high level of service for our clients. Catherine’s experience, expertise and service philosophy make her a perfect addition to our HFM team. She has lived our mission to educate and empower clients to make wise financial decisions even before she joined our firm.

We are thrilled to welcome Catherine and look forward to introducing you to her the next time you visit the office.

For Immediate Release Glassboro, NJ— HFM Investment Advisors, LLC, has expanded its Annual Gloucester County Coat Drive to support the broader South Jersey region, including Salem and Cumberland counties. This is their ninth year of collecting coats beginning October 15, 2018, and lasts through January 31, 2019.

So far HFM has collected and donated more than 15,200 coats to South Jersey residents in need over the past eight years. Last year, HFM amassed a record 3,006 coats. This year, HFM plans to top that record and surpass over 18,000 total coats collected.
Drop-off sites include HFM’s Glassboro, NJ office, all local Gloucester County Library System branches, the Margaret E. Heggan Public Library in Washington Twp., NJ, plus 30 additional locations. The Public can find a full list of the 30-plus drop-off locations at www.HFMadvisors.com/our-committment.
HFM guides others by helping them make effective financial decisions—but it cares about much more than numbers and charts. HFM supports its community through fundraisers, board memberships, nonprofit sponsorships, and more.

It achieves this goal through partnering with the Heart of South Jersey (www.heartsj.org), which distributes the donated coats to more than 20 nonprofit organizations that share one goal: helping others. As HFM extends its donation reach, Heart of South Jersey provides coats to veterans, children, families, and the homeless. The Y.A.L.E school of Cherry Hill provides volunteers to help count, sort and deliver coats throughout the drive.

“I’m eager to see the number of coats we collect this year grow with the help of your generous donations and more drop off box locations from last year. Our mission is to provide a coat for every man, woman, and child in need in South Jersey,” said HFM President Michael Pallozzi.

About HFM Investment Advisors, LLC.

HFM Investment Advisors is an independent, fee-based investment management and financial planning firm that empowers its clients through coaching and discipline. With a look-you-in-the-eye commitment, its goal is to keep clients educated, involved and confident in every financial decision they make. Learn more at www.HFMadvisors.com or call 856 232-2270.

An important part of financial planning is Tax Planning. With so many changes to the tax code this year HFM is highly encouraging everyone to review their tax plan or make a tax plan this summer with their CPA or tax advisor. Don’t get caught in April 2019 with a potentially higher tax bill than 2017. Now is the time you should consider making changes to your withholding NOT in December 2018. Read the latest news from the IRS.gov on what to do and we remind you to consult with your tax adviser as well.

IR-2018-145, June 28, 2018

Washington, DC – Taxpayers who owed additional tax when they filed their 2017 federal tax return earlier this year can avoid another unexpected tax bill next year by doing a “paycheck checkup” as soon as possible, according to the Internal Revenue Service.

The Tax Cuts and Jobs Act, the tax reform legislation passed in December, made major changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the Child Tax Credit, limiting or discontinuing certain deductions and changing tax rates and brackets.

These far-reaching changes could have a big impact on the tax refund or balance due on the tax return people file next year. The IRS encourages every employee to do a “paycheck checkup” soon to ensure they have the correct amount of tax taken out of their pay.

Checking and adjusting withholding now can prevent an unexpected tax bill and penalties next year at tax time. The IRS Withholding Calculator ( https://www.irs.gov/individuals/irs-withholding-calculator) and Publication 505, Tax Withholding and Estimated Tax, can help.

The IRS encourages taxpayers to be proactive:

Do a ‘paycheck checkup’ soon

The Withholding Calculator can help taxpayers apply the new law to their specific financial situation and make an informed decision whether to change their withholding this year.

Adjust their withholding as soon as possible for an even, consistent amount of withholding throughout the rest of the year.

Taxpayers with more complex situations may need to use Publication 505. The publication is more effective for employees who owe self-employment tax, the alternative minimum tax or tax on unearned income from dependents. It can also help those who receive non-wage income such as dividends, capital gains, rents and royalties. Publication 505 includes worksheets and examples to guide taxpayers through their particular situations.

Underpayment penalties

To avoid paying the estimated tax penalty, taxpayers should ensure they have enough tax withheld from their paychecks and appropriate estimated tax payments. Ordinarily, taxpayers can avoid this penalty by paying at least 90 percent of their tax during the year.

If taxpayers expect to owe at least $1,000 in tax after subtracting withholding and refundable credits, they should make estimated tax payments.

Using the Withholding Calculator or Publication 505

Taxpayers should have their completed 2017 tax return handy to help estimate the amount of income, deductions, adjustments and credits to enter. They’ll also need their most recent pay stubs to help compute their withholding to date this year. Results from these tools depend on the accuracy of information a taxpayer provides.

Employees can use the results from the Withholding Calculator or Publication 505 to help determine if they should complete a new Form W-4, Employee’s Withholding Allowance Certificate, and, if so, what information to include on the form.

The calculator may also be helpful to recipients of pension and annuity income. These recipients can change their withholding by filling out Form W-4P and giving it to their payer.

If a taxpayer’s personal circumstances change during the year, they should re-check their withholding.

Adjusting withholding

If an employee determines they should adjust their withholding, they should complete a new Form W-4 and submit it to their employer as soon as possible.

Some employers have an electronic method to update a Form W-4.

Taxpayers who change their 2018 withholding should recheck their withholding at the start of 2019. A mid-year withholding change in 2018 may have a different full-year impact in 2019, so if taxpayers don’t submit a new Form W-4 for 2019, their withholding might be higher or lower than intended.

If an employee has a change in personal circumstances that reduces the number of withholding allowances they can claim, they must submit a new Form W-4 within 10 days of the change.

The fewer withholding allowances an employee enters on the Form W-4, the higher their tax withholding will be. Entering “0” or “1” on line 5 of the Form W-4 means more tax will be withheld; entering a bigger number means less tax will be withheld.

Additional information

The Withholding Calculator does not request personally identifiable information such as name, Social Security number, address or bank account numbers. The IRS does not save or record the information entered on the calculator. Taxpayers should be aware of tax scams, especially via email or phone and cybercriminals impersonating the IRS. The IRS does not send emails related to the calculator or the information entered in it.

The calculator and Publication 505 are not tax-planning tools. Taxpayers needing advice regarding the new tax law and personal situations should consult a trusted tax professional.

Taxpayers can get more information on these topics at www.irs.gov/withholding. For information on steps taxpayers can take now to get a jump on next year’s taxes, including how the new tax law may affect them, visit IRS.gov/getready.

It’s brought up ad nauseum…

Social Security is running out. But perhaps it should be discussed even more, as the latest report from the Social Security Board of Trustees implies, as of yet, little is being done to reverse its fate.

In line with last year’s projection, the Board foresees full funding for the 83-year-old program to only last until 2034. At that time, 79 percent of benefits are expected to remain payable—a trivial boost from last year’s estimate of 77 percent.

What’s worse, the total annual cost of the program will likely exceed its income in 2018—and it’s anticipated that this trend will persist year-after-year. To make up for the shortfall, the program will need to dip into its reserves for the first time since 1982.

“People are living longer than any time in history and birthrates are declining. This phenomenon known as ‘population aging’ is financially straining government-sponsored retirement benefits,” Catherine Collinson, CEO and president, Transamerica Institute, Transamerica Center for Retirement Studies, and executive director, Aegon Center for Longevity and Retirement, explained in a statement about retiring in the 21st Century.

“Simultaneously, employers have been replacing traditional defined benefit pension plans with employee-funded defined contribution retirement plans,” she said. “Today, individuals are expected to take on increasing risk and responsibility in self-funding a greater portion of their retirement income.”

But instead, far too many Americans continue to set themselves up for failure.

Theoretically, Millennials should be doing better than older generations when it comes to retirement planning. In a separate study comparing generational trends, only 22 percent said they are factoring Social Security into their retirement planning. But sadly, they’re doing little to make up for it. Almost 40 percent still aren’t saving on their own.

Closest to retirement age, Baby Boomers are doing better at socking away money. Nine in 10 are saving on their own in a 401k or other account. Their nest egg might not be enough though, considering around 80 percent are counting on Social Security to supplement it.

Thankfully, it’s doubtful the program will collapse entirely during Boomers’ lifetime. Younger workers, on the other hand, are right to be concerned. Social Security experts say the government just might end up increasing payroll taxes and decreasing benefits in the coming years in order to rescue the program—less than stellar news for an already struggling younger generation of workers.

Summing up the Board’s report, Nancy A. Berryhill, Acting Commissioner of Social Security, said, “The Trustees’ projected depletion date of the combined Social Security Trust Funds has not changed, and slightly more than three-fourths of benefits would still be payable after depletion. But the fact remains that Congress can keep Social Security strong by taking action to ensure the future of the program.”

Here is a great article from 2017 we had to share…

Filling out a bracket for the NCAA championship basketball tournament is an annual highlight for sports fans like myself. Like most people, I don’t watch much of the regular season games, but every March I start reading expert picks and researching bracket strategy in preparation for pools with my family and friends.

The process reminds me so much of investing because filling out a bracket balances expertise, risk, reward and future expectations. Winning a pool also requires some luck along the way.

With that in mind, here are five lessons from March Madness that apply to the world of investing.

1. It’s not about being perfect, but positioning yourself to get the most right.

The odds of filling out the perfect bracket are 1 in 9,223,372,036,852,775,808. Let’s just round that to 1 in 9 quintillion. The odds of consistently selecting market beating investments over a long period of time are equally daunting.

The key to successful investing is about focusing on the things you can control. From an investment perspective that means building a portfolio that is positioned to capture return premiums (such as size, value, and profitability) that improve risk-adjusted returns. Other areas of focus that are within your control include asset allocation, keeping investment costs low, minimizing taxes, optimal asset location, etc.

2. Past performance guarantees nothing about the future.

It is easy to let a team’s recent success influence your bracket picks, but last year’s tournament was last year’s tournament. Similarly, investors should never assume that their best pick (asset class, sector, country, or stock) from last year will have a repeat performance.

In addition, the winner of your bracket pool might be skillful, but he/she might also just be lucky – there is no reason to believe that success will be repeated in the future. The same goes for mutual fund managers, their outperformance in any given period may be the result of skill or luck – in fact, it is quite common to see funds that have outperformed in a given period proceed to underperform in the subsequent period.

3. The drama goes up the more you watch.

The more you watch the NCAA tournament, the more emotional you become about the outcomes. Watching the drama of March Madness is a great form of entertainment, but watching the market closely almost never helps an investor. Myopic loss aversion tells us that the more you watch the markets, the more susceptible you become to making poor investment decisions. The best investors stay as detached as possible from daily stock fluctuations.

Humans are hardwired to see patterns and our tendency to only remember the times they work only engrains that pattern seeking behavior. For example, I always pick a #10 seed to upset a #7 seed based on my perceived frequency of that type of first round upset occurring in the past, but not based on any background knowledge of the skill sets of the opposing teams. Another example is picking your alma mater or a local school to advance further than what evidence and probability suggest.

Investment decisions should not be based on technical indicators, patterns or hunches. Instead, a quality decision making process emphasizes evidence-based investment theory and research. A quality decision making process should also protect us from our faulty mental hardwiring that causes us to misinterpret (or ignore entirely) probabilities, find patterns where none exist and elicit emotional responses.

5. People will brag about their success, but ignore the role of luck and past failures.

Chances are that many winners will attribute their success to skill and leave out the role that luck played in the outcome. For example, some people who win their pool by taking an extremely risky approach of picking lots of low probability upsets and having several come to fruition by chance. People that take this approach every year will frequently finish near the bottom of the standings, but they never mention those bad years.

Other winners might fill out multiple brackets, compete against only a handful of people or simply make their picks by blending together multiple expert brackets. Still, all of these people will undoubtedly share their success through the lens of skill when a conversation arises about March Madness. Conversations on investing in social situations work much of the same. I always hear people talking at social gatherings about their investment successes, but never do I hear about their failures.

Congress has just passed the most sweeping tax code overhaul in decades. The majority of its provisions kicked in on January 1st and many of the changes will expire after 2025. The tax law changes should have almost no effect on your 2017 tax return.

Let’s take a look at some of the more important provisions within the new law, and the likely effect on your taxes:

1. Tax brackets have changed.

The new law keeps seven tax brackets but changes the tax rates, which shifts income into lower tax brackets. The long-term capital gains tax rates remain essentially unchanged, and short-term capital gains will be taxed at the new ordinary income tax rates.

Most (although not all) taxpayers will owe less under the new rules, according to analyses by various independent think tanks, including the Tax Foundation and the Tax Policy Center. The impact of the changes will vary based on each taxpayer’s income level, amount of itemized deductions and other factors.

Former ordinary income tax brackets compared with brackets in the new law for tax year 2018.

Source: Schwab Center for Financial Research.

2. The standard deduction has increased.

The new law nearly doubles the standard deduction, to $12,000 from $6,350 for single filers, and to $24,000 from $12,700 for married filers. About 70% of taxpayers claim the standard deduction, so most taxpayers claiming this deduction likely will benefit from this change.

If you’re a low- or middle-income household, an increased standard deduction combined with an increased child tax credit should lower your tax bill.

3. Some itemized deductions have been reduced or eliminated.

The new law reduces or eliminates many itemized deductions in favor of a higher standard deduction. These include:

Limiting the deduction for state and local income taxes, property taxes, and real estate taxes to $10,000.

Limiting the mortgage interest deduction to $750,000 of indebtedness.

Eliminating all miscellaneous itemized deductions.

Here are the itemized deductions that remain relatively unchanged:

Medical expenses: The new law preserves the deduction for medical expenses and temporarily reduces the limitation from 10% to 7.5% of adjusted gross income for tax years 2017 and 2018. Beginning in 2019, only medical expenses that exceed 10% of adjusted gross income are deductible.

Charitable donations: The new law preserves all the major charitable donation deductions, with the exception of few specific deductions (such as the deduction for payments made in exchange for college athletic event seats).

All else being equal, if you’re in a high-income household in a high-tax state, with a mortgage and high property taxes, these changes could end up increasing your tax liability. However, if you don’t normally itemize your deductions these changes won’t be an issue, and the increased standard deduction should end up benefiting you.

4. The child tax credit has increased.

The new law increased the child tax credit to $2,000 from $1,000, and the income level of households eligible for the credit. The tax credit is fully refundable up to $1,400, and begins to phase out for married/joint filers at income of $400,000 and for single filers at $200,000.

5. The personal exemption and dependent deduction have been eliminated.

The new law eliminates the $4,050 personal exemption and dependent deduction. When combined with the increased standard deduction and increased child tax credit, lower- and middle-income households should see a net benefit despite the elimination of these deductions.

However, higher-income taxpayers could see an increased tax bill from this proposal if they have large families and don’t qualify for the child tax credit, because of the income phase-outs within the tax bill.

6. The alternative minimum tax (AMT) was changed but not eliminated.

The new law increases both the exemption and the exemption phase-out amount for the individual AMT. Beginning in 2018 and ending in 2025, the AMT exemption amount is increased to $109,400 for married taxpayers filing a joint return and $70,300 for all other taxpayers. The phase-out thresholds are increased to $1 million for married taxpayers filing a joint return, and $500,000 for all other taxpayers.

These changes should benefit many middle- and high-income households that were previously affected by this tax.

The Senate tax bill had a provision that would have required investors to use the “first-in, first-out” (FIFO) method to calculate cost basis for investment sales. Investors can breathe a sigh of relief, as this provision was not included in the new tax law.

8. Changes to the taxation of income from pass-through entities.

This is a complex area of tax law, and the new law includes numerous changes to the taxation of income from pass-through entities such as S corporations, limited-liability corporations and partnerships. In general, the new law allows businesses to exclude 20% of their net income from taxation, subject to certain limitations. The deduction could also be limited or disallowed for specified service trades—such as lawyers, doctors and accountants—based on an income threshold.

Overall the changes to the taxation of pass-through entities will be beneficial to many business owners, but a lot of service businesses won’t get to enjoy all the benefits of these changes.

9. The corporate tax rate has declined.

The new tax law reduces the corporate tax rate to flat 21% from the highest 35% rate in the prior system. Lowering the corporate tax rate will increase the profits of many companies, which could provide additional capital for business expansion, increase dividends to shareholders and make the U.S. a more attractive place for foreign businesses to open operations.

10. There were no changes to tax-deferred retirement accounts.

Early on in the tax debate, it was rumored that there could be changes to the deductions taxpayers receive for contributing to tax-deferred retirement accounts, such as IRAs or 401(k) retirement plans. The new tax law did not include changes to tax deferred accounts.

Bottom line:

It’s important to remember that the impact of any of these changes on your personal tax liability will depend on your specific circumstances. In addition, the individual components of your tax bill, including earned income, credits, deductions and other factors work together, like interacting cogs. Therefore, each factor should not be assessed solely in isolation.

2018 TAX POLICY HIGHLIGHTS

From The House Ways and Means Committee & Senate Finance Committee

The Tax Cuts and Jobs Act (H.R. 1) overhauls America’s tax code to deliver historic tax relief for workers, families and job creators, and revitalize our nation’s economy. By lowering taxes across the board, eliminating costly special-interest tax breaks, and modernizing our international tax system, the Tax Cuts and Jobs Act will help create more jobs, increase paychecks, and make the tax code simpler and fairer for Americans of all walks of life.With this bill, the typical family of four earning the median family income of $73,000 will receive a tax cut of $2,059.

For individuals and families, the Tax Cuts and Jobs Act:

Lowers individual taxes and sets the rates at 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37% so people can keep more of their hard-earned money.

Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,350 and $12,700 under current law to $12,000 and $24,000 for individuals and married couples, respectively.

Continues to allow people to write off the cost of state and local taxes – just like current law – up to $10,000. Gives individuals and families the ability to choose among sales, income and property taxes to best fit their unique circumstances.

Takes action to support more American families

by:

Expanding the Child Tax Credit from $1,000 to $2,000 for single filers and married couples to help parents with the cost of raising children. The tax credit is fully refundable up to $1,400 and begins to phase-out for families making over $400,000. Parents must provide a child’s valid Social Security Number in order to receive this credit.

Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.

Preserving the Adoption Tax Credit so parents can continue to receive additional tax relief as they open their hearts and homes to an adopted child.

Preserves the mortgage interest deduction– providing tax relief to current and aspiring homeowners.

For all homeowners with existing mortgages that were taken out to buy a home, there will be no change to the current mortgage interest deduction.

For homeowners with new mortgages on a first or second home, the home mortgage interest deduction will be available up to $750,000.

Provides relief for Americans with expensive medical bills by expanding the medical expense deduction for 2018 and 2019 for medical expenses exceeding 7.5 percent of adjusted gross income, and rising to 10 percent beginning in 2020.

Continues and expands the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization.

Eliminates Obamacare’s individual mandate penalty tax– providing families with much-needed relief and flexibility to buy the health care that’s right for them if they choose.

Maintains the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.

Improves savings vehicles for education by allowing families to use 529 accounts to save for elementary,secondary and higher education.

Provides support for graduate students by continuing to exempt the value of reduced tuition from taxes.

Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts (IRAs) so Americans can continue to save for their future.

Increases the exemption amount from the Alternative Minimum Tax (AMT) to reduce the complexity and tax burden for millions of Americans.

Provides immediate relief from the Death Tax by doubling the amount of the current exemption to reduce uncertainty and costs for many family-owned farms and businesses when they pass down their life’s work to the next generation.

For job creators of all sizes, the Tax Cuts and Jobs Act:

Lowers the corporate tax rate to 21% (beginning Jan. 1, 2018)– down from 35%, which today is the highest in the industrialized world – the largest reduction in the U.S. corporate tax rate in our nation’s history.

Delivers significant tax relief to Main Street job creators

by:

Offering a first-ever 20% tax deduction that applies to the first $315,000 of joint income earned by all businesses organized as S corporations, partnerships, LLCs, and sole proprietorships. For Main Street job creators with income above this level, the bill generally provides a deduction for up to 20% on business profits– reducing their effective marginal tax rate to no more than 29.6%.

Establishing strong safeguards so that wage income does not receive the lower marginal effective tax rates on business income – helping to ensure that Main Street tax relief goes to the local job creators it was designed to help most.

Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing growth of jobs, productivity, and paychecks.

Protects the ability of small businesses to write off interest on loans, helping these Main Street entrepreneurs start or expand a business, hire workers, and increase paychecks.

Preserves important elements of the existing business tax system, including:

Retaining the low-income housing tax credit that encourages businesses to invest in affordable housing so families, individuals, and seniors can find a safe and comfortable place to call home.

Preserving the Research & Development Tax Credit that encourages our businesses and workers to develop cutting-edge “Made in America” products and services.

Retaining the tax-preferred status of private-activity bonds that are used to Enhance valuable infrastructure projects.

Eliminates the Corporate Alternative Minimum Tax, thereby lowering taxes and eliminating confusion and uncertainty so American job creators can focus on growing their business and hiring more workers, rather than on burdensome paperwork.

Modernizes our international tax system so America’s global businesses will no longer be held back by an outdated “worldwide” tax system that results in double taxation for many of our nation’s job creators.

Makes it easier for American businesses to bring home foreign earnings to invest in growing jobs and paychecks in our local communities.

Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.

For greater American energy security and economic growth, the Tax Cuts and

Jobs Act:

Establishes an environmentally responsible oil and gas program in the non-wilderness 1002 Area of the Arctic National Wildlife Refuge (ANWR). Congress specifically set aside the 1.57-million acre 1002 Area for potential future development. Two lease sales will be held over the next decade and surface development will be limited to 2,000 federal acres – just one ten-thousandth of all of ANWR.

Significantly boosts American energy production. Responsible development in the 1002 Area will raise tens of billions of dollars for deficit reduction in the decades to come, while creating thousands of new jobs, reducing our dependence on foreign oil, and helping to keep energy affordable for American families and businesses.

Provides a temporary increase in offshore revenue sharing for the Gulf Coast in 2020 and 2021, allowing those states to invest in priorities such as coastal restoration and hurricane protection.

Authored by the US House Ways and Means Committee https://www.scribd.com/document/367282583/GOP-tax-bill-highlights#from_embed

Albert Einstein is synonymous with genius. Yet, when talking with his friend and personal tax account, he once said, “The hardest thing in the world to understand is the income tax.” His story reveals two things: First, filing taxes can be difficult. Second, even geniuses consult financial planners.

Because filing taxes can be a complicated process, people are more likely to make small errors that can have costly consequences. But, there are steps you can take to simplify the process, avoid mistakes and save money.

Get organized: Start with the basics: save, centralize and organize your important tax-related documents to avoid losing important information. This includes earning statements such as W-2 or 1099-MISC forms; additional income statements like investment earnings; and information on potential tax breaks such as deductible student loan interest documentation and charitable contributions.

Collaborate: Two heads are better than one. Discussing these materials with your spouse can help you more accurately organize tax statements, such as deductions and credits. When both partners understand their tax forms, each individual can help prepare for future filings and check for errors.

File strategically: How you file a tax return can impact how much you pay. Consider all of your options before completing a tax return, such as head of household, married and filing separately, and having your dependents file separately.

Timing matters: Failing to pay larger expenses in the last quarter of the year, such as a mortgage payment or large medical expense, can significantly reduce your potential tax refunds. Instead, plan ahead to reduce the risk of late fees as well as missed refund opportunities.

Maximize your IRA contributions: Unless your spouse is covered by an employer-provided retirement plan and your adjusted gross income exceeds IRS limits, maximizing your traditional IRA will reduce your taxable income through relevant deductions. If you use a nondeductible IRA, consider a Roth IRA, which has a higher income limit and the potential to avoid taxation after withdrawing earnings.

Be careful: Many Americans wait until the last minute to file their taxes, which often results in basic mistakes, such as using wrong or missing Social Security numbers, incorrect bank numbers, misfiling a return and simple math mistakes. In the event that you make a small error when filing, wait to see if the IRS calls. For more significant errors, you should amend your tax return via a 1040X form as soon as possible. In addition, if you can’t make the April 15thdeadline, file a 4868 form. This will grant you six additional months to file, but will also require you to pay added taxes owed for the year.

There are steps available to avoid mistakes while potentially saving you more money.

We also recommend following Albert Einstein’s example and consult a Pro- A tax professional and a financial advisor. They can help you better understand your options.

SNJ Today featured HFM Investment Advisors, Inc. for launching its 8th Annual Coat Drive. By spreading the word and informing more people of our goal to keep South Jersey citizens warm this coming winter, HFM hopes to collect a record-setting amount of coats.

To find out how you can help, where you can donate a coat, and who the donations benefit, click here: Help Your Community

HFM Investment Advisors, LLC (“HFM”) is a registered investment adviser offering advisory services in the states of New Jersey, Pennsylvania, and Texas and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by HFM in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption. Please see Here for additional disclosures.